* Canadian dollar rises 0.4 percent against the greenback
* Loonie touches its strongest since Dec. 21 at 1.3528
* Price of U.S. oil rises 1.8 percent
* Canadian bond prices fall across a steeper yield curve
TORONTO, Jan 3 (Reuters) - The Canadian dollar strengthened to a nearly two-week high against its U.S. counterpart on Thursday as oil prices rose and the greenback broadly declined.
Gains for the loonie came ahead of the release on Friday of Canada's employment report for December, which could help guide expectations for next week's interest rate decision from the Bank of Canada.
At 9:08 a.m. (1408 GMT), the Canadian dollar CAD=D4 was trading 0.4 percent higher at 1.3530 to the greenback, or 73.91 U.S. cents. The currency, which fell 7.8 percent in 2018, touched its strongest since Dec. 21 at 1.3528.
The price of oil, one of Canada's major exports, rose despite volatile currency and stock markets, as well as concerns that an economic slowdown in 2019 will curb fuel demand. U.S. crude CLc1 prices were up 1.8 percent at $47.38 a barrel. tumbled after Apple Inc AAPL.O stunned investors with a rare sales warning that inflamed fears that the Sino-U.S. trade war and a slowing China economy would erode corporate profits more than expected. U.S. dollar .DXY declined against a basket of major currencies as the yen surged. Investors were attracted to the perceived safety of the Japanese currency. government bond prices were lower across a steeper yield curve, with the two-year CA2YT=RR down 2 Canadian cents to yield 1.853 percent and the 10-year CA10YT=RR falling 12 Canadian cents to yield 1.916 percent.
The gap between Canada's 10-year yield and its U.S. equivalent narrowed by 3.6 basis points to a spread of 72.4 basis points in favor of the U.S. bond, its narrowest since Nov. 28.